Syracuse, New York (WSYR-TV) - The holidays are coming up, and with the economic downturn, many people will be looking for ways to save.
The rent-to-own industry is booming right now, but don't think small payments now, will save you in the long run. Central New Yorkers are paying up to three times more than they would if they just bought the item off a store shelf.
Senator Chuck Schumer's office did a study earlier this year that shows exactly how much you pay in the long run when you rent to own, and you won't believe the numbers they came up with.
If you were to buy a 37-inch Toshiba HDTV right now, it would cost you $850; if you were to go to Rent-A-Center and rent-to-own it over two years with all the fees included, it would end up costing more than $3,000.
How about a Whirlpool washing machine? It’s $899 when you buy it from the store, and more than $2,000 when you rent to own over two years.
The matching dryer retails for $749, but after rent-to-own, you pay $1,870.
Businesses are only allowed to charge you up to 30 percent in interest, so, if you're at all considering this, sit down with a calculator and do your homework.
If you don't have the money up front to buy something new, consider other forms of financing.
The rent to own trade assoication says 75% of their customers do not rent to own, they turn the items back in. If you do want to purchase an item, they claim most customers can choose shorter terms and not end up paying as much.
Statement from Rent-A-Center:
"Rent-A-Center discloses all prices up-front in writing and lets customers purchase the merchandise they’re renting at any point during their rental period. In fact, more than two-thirds of customers who end up buying do so at substantial savings over the maximum total rent shown in their contracts."
